8 corporate traps startups always fall into

Your startup is a real business. It’s more than just a side business or passion project. You have to turn it into a big company without losing the advantages of being a startup.

The problem is that the lure of big business crutches will always be there and will outweigh your startup’s advantages in the long run.

As a 30-year startup veteran, I’ve reached a point in my career where I’m called upon to fix companies, both high-growth startups and large corporate companies. After dozens and dozens of fixes, I’ve developed some controversial views.

These are the main things I have to undo, the states I have to un-remove, the corporate traps startups keep falling into.

Oh, and for the record, I’m not judging here. I have fallen into all of these traps myself, sometimes more than once.

Despite how innocuous this measure may seem at first glance, it is one of the ones that receives the most rejection. And not just any kind, but the “you’re an idiot” kind.

Let me clarify that I completely understand the need for everyone in your company to know everything that is going on as soon as something happens. Information is the lifeblood of success, and I completely agree with the desire for that information to flow freely through an organization.

But today’s state meeting is the crutchiest kind of crutch I’ve ever walked on crutches.

This is what happens in almost every corporate environment in the world. Let’s say you schedule a one-hour status meeting on Mondays at 10:00 am. What will happen is that everyone responsible for that situation will spend the hour from 9:00 to 10:00 working as hard as they can to create the most compelling progress visualization possible. Then, from 10:00 to 11:00, they will overexplain that visualization. Then, at 11:00 (or more likely, 12:00), they will go back to doing what they were doing before the meeting.

I like to add up the hourly equivalent of the salary of everyone attending the meeting. That’s what this theatrical display costs the company.

Instead, foster a transparent culture of accountability and communication throughout the organization and eliminate the crutch of status meetings. I can write another post about that if you want.

You don’t need a CTO. You don’t need a VP of Revenue. You don’t need a Marketing Director.

I can’t tell you how many times I’ve seen startups overhire for a position, because they didn’t know they could ask for exactly what they needed.

Take for example the chief technology officer. The CTO title at a five-person startup, or even a 20-person startup, is meaningless. If you apply for a CTO, and you don’t have a technical team of at least 20 people, you’re going to attract a lot of people who just want to manage a technical team of 20 or more people.

Instead, look for exceptional talent who believes in your vision and mission and can grow with you. You’d be surprised how much money you’ll save and how much your results will improve when you’re honest about what you want.

OK, let me put this on the table.

I’ve seen more Entrepreneur Operating System (EOS) deployments in recent years than I have since I became an entrepreneur, and almost all of them were installed by some type of certified company. By the time I get involved in the business, this has typically resulted in a series of spreadsheets that are mostly empty for the past six months.

This looks like PMI/PMP again with a different name and better marketing.

But I would extend it even to methodologies like Agile. For a startup, the risks of too much analysis, documentation, lack of clarity, and increased technical debt often far outweigh any rewards gained from using a common methodology to centralize company goals.

Instead of going all out on any pre-packaged methodology, just choose the parts you like from several and make sure you are consistent with them.

Avoiding this trap seems like common sense, but it often happens as a byproduct. A startup will create technology, finance, human resources, marketing, sales, etc. teams, hire its leaders and let them set their own goals and work towards them completely independently.

It’s almost a foregone conclusion that creating an independent team is going to result in that team working in a vacuum. Why is this happening? Well, people will talk about the company growing too big to work as a single unit. But in my experience, it almost always happens because the first three traps I just talked about have already occurred.

Instead, encourage everyone in your organization to contact anyone else in your organization, anytime, for whatever reason. Next, create rules about when to use email, Slack, Zoom, phone, text, and/or approach someone’s table.

Do you remember those movies (Dodgeball comes to mind) where a struggling business owner gets audited for some reason and pulls out a box of crumpled receipts?

In a way, they are right.

Until your growth makes tracking progress too complex for a spreadsheet or too unique for a free third-party app, spend the money on the tools that will make that growth happen instead.

Listen, I know I’m not the first person to tell you this, so let me be the loudest.


You don’t have to plan every use case. You don’t have to carry every ounce of prevention on your startup’s scrawny shoulders.

You are going to make mistakes, the unforeseen is going to happen, the unpredictable is waiting around every corner, no matter how prepared you are.

Instead, prepare lightly and load up on energy.

There’s a reason why one of the most famous rock bands of the last 30 years is called “Foo Fighters.” It’s because the guy who founded the band worked too much to spend time thinking about the name.

From a more business standpoint, I’ve seen startups spend money on ads that only included their cute logo and catchy tagline. That money could very well have been shredded or burned.

But I understand it. One of the reasons we became entrepreneurs was to do interesting things. And the desire to make them attractive will always be part of it. In business, that’s building a brand.

But every moment a startup spends thinking about their brand is a moment they lose gaining the market share that would make building the brand worthwhile for them. Instead of playing that game of Catch-22, focus on the value behind the brand and let the brand building happen on its own.

I have lived this. I have asked founders. I have surveyed them about it. The smaller your business, the less likely macroeconomic changes and trends will influence your success, both good and bad.

For example, the best time to start a business is when the economy is bad. An unstable macroeconomic outlook is often a recipe for change, for lazy companies to have nowhere to hide, for incumbents to be disrupted, and for talent to be cheap.

On the other hand, while every company in the world with more than 1,000 employees and $100 million in revenue is doing their best to fit the square peg of AI into their round holes, I have always recommended that startups ignore AI. , unless they are specifically building around it.

Unless your business is local and the macrotrend or change becomes microtrends, such as inflation, the shock waves that follow – again, both good and bad – almost always dissipate by the time they reach the level of startups and small businesses. Instead, anticipate the impact of those trends and changes on customers and competitors, and be flexible enough to react.

They are not golden rules, but what I have learned over decades. And at some point, your startup will grow enough to have to shoulder some of this corporate weight. Stay away from these traps as long as you can.